Category Archives: Economic fundamentals

Joe Firestone: Progressives Re-Arrange the Deck Chairs for Obama’s Austerity Budget

With friends like the austerity-loving Congressional Progressive Caucus, who needs enemies?

Philip Pilkington: Thinking Makes It So – The IMF Bailout of the UK in 1976 and the Rise of Monetarism

Monetarism began it’s rise to world prominence in the ever-conservative Bundesbank in 1974. But it would be the government of Margaret Thatcher in the UK, elected in 1979, that would truly launch monetarism in central banking. After Thatcher’s monetarist experiment undertaken between 1979 and 1984 every economics student would be taught to recite the various monetary aggregates by heart for at least a decade or two.

This is what accounts for the monetarist bent we see in the economists of the last generation. Basically any economist trained between roughly 1980 and 1995 would be heavily exposed to monetarist dogma. And only those that read alternative accounts of money creation — namely, the theory of endogenous money — would be fully immunised. This explains, for example, why certain economists that champion Keynesian policies — like Paul Krugman — actually speak in monetarist tones.

Neo-liberalism Expressed as Simple Rules

And we go to Happyville, instead of to Pain City. For some definition of “we.”

Gaius Publius: Neoliberalism, “Just Desserts,” and the Post-Climate-Crisis Economy

Gaius examines the connections between neoliberalism and the convulsions that climate change will bring to the world.

The Jobs Report Covering February 2014: Seasonal Signs of Life But Nowhere Near Full Employment

Yves here. Due to a communication failure between Lambert and me, you are getting Hugh’s report on the monthly employment release late. Apologies!

Joe Firestone: No, Virginia, the Austerity Era Is Not Over

If the President’s budget were enacted by Congress, and OMB’s projections over the next decade hold, it would almost certainly mean economic stagnation punctuated by recession over the next decade. Would it also mean austerity?

Tax Havens Make US and Europe Look Poorer than They Are, Exaggerate Size of “Global Imbalances”

Peculiarly, despite the importance of tax havens, a pathbreaking paper published in 2013 by Gabriel Zucman of the Paris School of Economics, The Missing Wealth of Nations: Are Europe and the U.S. Net Debtors or Net Creditors? (hat tip Dikaios Logos) has received perilous little attention. Perhaps that’s because, among other things, it undercuts the Bernanke-flattering claim that “global imbalances” were a major driver of the financial crisis.

Don Quijones: Corporate Colonialism – Winners and Losers of Global ‘Free’ Trade

I think of globalisation as a light which shines brighter and brighter on a few people, and the rest are in darkness, wiped out

Randy Wray: MMT and External Constraints

To fix or to float, that is the question.

Wage Shares Fall in the US, Germany and Many Other Countries While Financial Shocks Hit Emerging Economies

ves here. This Real News Network interview with Yilmaz Akyuz, formerly the Director of the Division on Globalization and Development Strategies at the United Nations Conference on Trade and Development (UNCTAD), describes how the problems that produced the financial crisis have morphed into new, no less troubling problems. One key part of this discussion focuses on how China has adapted to its considerably smaller trade surplus, and why having Germany as the new excessive exporter poses new perils to the global economy.

Gaius Publius: Rising Inequality – Recovery Occurring Almost Exclusively Among the Wealthy

America’s income inequality has grown so wide that the current “recovery” is driven primarily by the upper fifth of income earners, as revealed by the latest consumer spending data.

Joe Firestone: Dear Dr. Krugman – Please Let Me Explain

Paul Krugman can’t explain why the deficit issue has suddenly dropped off the agenda. Perhaps I can help.

Wolf Richter: Cracks In The Tech Bubble (That Doesn’t Exist)

After having denied feverishly that any kind of bubble exists, people watch incredulously as the hot air hisses out of the very bubble whose existence they’re still denying. And afterwards, everyone had seen it coming. Because cracks had been visible for a long time.

One of the cracks is Twitter.

Philip Pilkington: Paul Krugman Pushes Factually Inaccurate Arguments About Argentina to Support Discredited Monetarist Ideas

Yves here. With Argentina one of the emerging markets economies whose currency has taken a huge tumble, its aggressive pro-labor, redistribution-oriented policies have come under attack (as an aside, one has to note that Turkey, which was touted as a model emerging economy a few years back, is also fighting a currency downspiral). And a predictable by-product is that some of Argentina’s policies have been misrepresented. For instance, it’s widely accused of “living beyond its means”. Yet as this post shows, the government ran surpluses in eight of the past ten years.

Danger of Global Recession After 30 Years of Neoliberal Counterrevolution

Heiner Flassbeck is one of the few economists to get into positions of influence despite being firmly opposed to the prevailing doctrine of neoliberalism. He’s also direct and articulate.